The Fuzz Factory doesn't have a feedback loop to create its oscillation. It oscillates because it is an unstable circuit. The feedback that causes its oscillation comes from poorly controlled currents happening between different elements of the circuit. Many fuzzes are able to have this "feature" if you design/build it carelessly. The oscillating in the Fuzz Factory is controlled by the "Stab" knob, which varies the voltage to the circuit, which in turn affects how it oscillates.

for a circuit to oscillate it has to satisfy the barkhausen criterion: have 180 deg. of phase shift or greater _at a frequency where there is positive gain_. this can be done by a phase shift oscillator deliberately or accidentally by incorrect frequency compensation, which is what's going on here. the circuit has no compensation elements, e.g. a capacitor from collector to base (miller capacitor) so the high frequency response is uncontrolled basically. any variation in device type or wiring related stray impedances can cause varying gains in the high frequency region, so if there is enough phase shift due to additional stray capacitance along with enough gain (which there is a ton of in this circuit) you can get oscillation.